How Headspace Is Winning the Cutthroat Meditation App War
In the race to quell our growing anxiety, Headspace may have a secret weapon
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Headspace and Calm share the same friendly mission: Headspace wants “to improve the health and happiness of the world” while Calm wants to “make the world healthier and happier.” But the two companies, which both make apps that guide people through meditation exercises, are engaged in a cutthroat competition, one that has only intensified as the nation faces a growing mental health crisis exacerbated by the pandemic.
Before Covid hit, both companies had raised a lot of funding. Calm raised a $115 million Series B round in 2019. In February 2020, Headspace raised its Series C round, $93 million in equity and debt. Just a few months later, it extended the round and added another $47.7 million in equity. Since March, the companies have both spent millions on television commercials: Calm spent some $15.6 million on TV ads between March and August (up from $3 million the year before) and Headspace spent $27.3 million on its TV campaign, according to the New York Times.
But Headspace may soon have a big advantage over Calm. The company has been expanding aggressively in its effort to provide wellness benefits for employers, and to gain distribution through the traditional health care system.
The holy grail of insurance reimbursement
As of August 2020, Headspace reported having 1,100 partnerships for its Headspace for Work product. (Calm for Business, not far behind, had 300 clients as of October 2019.) This week, Microsoft also announced it was adding Headspace meditation to its Microsoft Teams product. Similar to WeWork’s corporate office offering, these employer deals are usually set for longer terms than a customer’s subscription, and can help bring more stability than the consumer business.
What could set Headspace’s program apart from Calm and other wellness apps selling to employers is…
